Cash-on-Cash Return = Annual Pre-Tax Cash Flow ÷ Total Cash Invested
FAQ
What's a good cash-on-cash return?
Many buy-and-hold investors target 8–12%+, but it varies by market, risk tolerance, and how much appreciation or tax benefit you're underwriting alongside cash flow.
How is this different from cap rate?
Cap rate ignores your financing; cash-on-cash return is built around it. Two investors can buy the identical property and get very different cash-on-cash numbers depending on their down payment and interest rate.
Should closing costs and rehab count as cash invested?
Yes — cash-on-cash return should reflect every dollar you actually wired to get the property rent-ready, not just the down payment.
Other Calculators
- Cap Rate Calculator
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- BRRRR Calculator
- Flip Spread Calculator
- 1031 Exchange Calculator
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